Ladies and gentlemen, good day and welcome to Star Cement, Star Cement Limited Q1 FY25 earnings conference call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Navin Sahadeo. Thank you, and over to you, sir. Thank you, Leila. Good afternoon, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY 2025 earnings call of Star Cement. We have with us, from the management, we have with us Mr. Tushar Bhajanka, Deputy Managing Director, and Mr. Manoj Agarwal, the CFO of Star Cement. Without any further ado, I hand over the floor to Tusharji for his opening comments. Over to you, sir. Good afternoon all. My name is Tushar Bhajanka, and I'm the Deputy MD of Star Cement. I would like to welcome you all to the earnings call of quarter one. I have our CFO of the company with me. He will run you through the numbers of quarter one, and then we can pass to the Q&A session. Thank you. Yeah. Hi friends, this is Manoj Agarwal, CFO of Star Cement. Very good afternoon. I on behalf of Star Cement Limited welcome you all to our phone call for discussing our number of Q1 FY25. I would just like to clarify that we will be discussing on the historical number, and there is no invitation to invest. Having said that now, I will just take you through the Q1 number. Starting from clinker production during the quarter end of June 2024, we have produced 686,000 tonnes of clinker as against 727,000 tonnes same quarter last year. So far as cement production is concerned, we have produced 1,180,000 tonnes this quarter, which is almost same as compared to same quarter last year. Now I will take you through sales volume. During the quarter, we have sold 11.54 lakhs tonnes of cement and negligible quantity of clinker as against 11.54 lakhs tonnes of cement and 0.11 lakhs tonnes of clinker same quarter last year. This is as far as cement and clinker sale is concerned. As far as geographical distribution of cement is concerned, in Northeast we have sold around 8.50 lakhs tonnes as against 8.36 lakhs tonnes during same quarter last year. As far as outside Northeast is concerned, we have sold 3.04 lakhs tonnes of cement this quarter as against 3.29 lakhs tonnes same quarter last year. In terms of blend mix, it is almost 9% of OPC and the rest is PPC. These are the quantitative numbers of the quarter. Now I will take you through financial. The total revenue figure this quarter is around INR 736 crore as against INR 755 crore same period last year. As far as EBITDA figure is concerned, this quarter we have done an EBITDA of around INR 118 crore as against INR 138 crore last year. The decrease in EBITDA is mainly on account of outside clinker purchase during this quarter, which has an impact of approximately INR 28 crore. PAT is INR 31 crore in this quarter as against INR 93 crore last year. The decrease in PAT is mainly on account of increased depreciation due to capitalization of complete subsidiary cement grinding unit at Guwahati and complete clinker plant at Lumshnong, Meghalaya. On per-ton EBITDA, friends, it is 1,018 during this quarter as against 1,185 per ton same quarter last year. This is what our quarterly numbers are. Now I request all of you that if you have any query, you can ask us in, and I will request Navinji to moderate the query wherever it requires. Thank you. Thank you very much. Yes. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Thank you, sir. Sir, first, a couple of data points: trade share, premium share, lead distance, and Kcal costs in Q1. Yes. So the trade share in Q1 was about 84%. The non-trade, of course, was 15%. The premium sale was at 9.2%. And what was the third one that you mentioned? Lead distance and Kcal cost. Okay. So the lead distance was about 207 km, and the Kcal cost was INR 1.50. Okay. Sir, now in this quarter, we are seeing just a marginal 1% kind of a decline on the volume, and we were looking at close to 18%-20% for this year. So the ask rate for nine months is more than a 27% kind of a number. So how do we now look at in terms of full-year volume? So this quarter was exceptionally bad, the reason being the monsoon and the elections, right, which of course broke the momentum of the market. Even right now, the monsoon in Northeast is pretty hard. It is much worse than last year in Northeast, the monsoon. So I think that is why the revenue numbers look subdued. So our expectation of the volume that we would be able to do this year would definitely get revised because of the bad quarter one that we had in terms of the revenue growth. Though despite the bad monsoon in Northeast, we have grown in Northeast by about 3%, but we have degrown in outside Northeast by about 8%. So in Northeast, we did see a marginal increase in the volume and the revenue, but it was. It got diluted because of the revenue outside. For full-year now, how we look at in terms of volume growth? So in terms of volume growth, in the coming three quarters, we can expect a volume growth of about 14%-15%. That is what our expectation is. So we're bringing it down, our volume growth target from 18%-20% to 15% for the coming three quarters. Okay. Okay. In terms of the profitability particularly, last time we were looking at 1,550 kind of EBITDA per ton for this year. So obviously, this quarter is close to INR 1,000 odd. Two things to understand there. One is what was the EBITDA per ton outside northeast, and now in terms of the pricing, how are the pricing both in northeast and outside northeast? Given the cost, is there particular cost? There are two, three line items where the cost actually has gone up maybe because of the new clinker unit. Particularly, the RM cost has gone up. If you can help us understand how now the cost one can look at as the utilization fix of. Finally then how we look at in terms of the EBITDA per ton for full-year. Yes. So I mean, if I break the question into different halves, right, first, I think the pricing, of course, in East is declining. The outside Northeast pricing is declining. It has fallen. Even after quarter one, it has fallen by about INR 12-13 on the EBITDA level. The NPR has fallen by about INR 12-13. That is for East, which includes West Bengal and Bihar and also Northeast. And I think that is a trend throughout other areas of East as well. In terms of the target for 1,500, there were two to three factors which led to us believing that we will be able to achieve INR 1,500 EBITDA per ton, which we still maintain. The reason why the profitability this quarter is low for Star Cement is because we bought INR 30 crore worth of clinker from outside because our clinker plant that we commissioned in April had some technical difficulties due to which it was not able to produce clinker till end of May. So we had to buy clinker from outside, and that is the main reason why Star Cement's profitability has declined. So the impact was roughly about INR 30 crore-INR 32 crore. That was almost about INR 250 per ton impact, right? If we add that to the EBITDA per ton, which is about INR 120 this quarter one, we add that INR 250 per ton, then we see that it is coming closer to INR 1,300. On top of that, there was a INR 6 crore political donation this quarter, which I do not see it repeating in the coming quarters. So that again had an impact. The third impact was of the manpower cost because we have capitalized that some of the project costs were coming into the operations now. So we are taking steps to control our manpower costs. And with that, I do see a positive uptick in the EBITDA. The main factor is that the GST benefit that we are supposed to get in Assam because in the quarter one, the input tariff was getting adjusted. So only on June 15th will we actually start getting our SGST benefit from Assam. And from quarter two onward, we will see the full effect of the SGST benefit. So despite the fact that the market prices are going down, we do still anticipate that in the year-round figure, we would be able to kind of close it at about INR 1,500 per ton EBITDA. Okay. That's great. So broadly, just trying to further harp on the costing front, obviously, you mentioned INR 30-32 crore kind of a clinker that we bought and the staff cost. So if you can help us in terms of both in terms of the staff cost, also this INR 62 crore kind of a quarterly run rate, how much reduction can we look at from the Q2? And now have we now stopped the clinker purchasing so that the cost will start coming in? So broadly, whatever the increase now we are looking at to reach a 1,500-odd kind of EBITDA per ton, is it mainly entirely from the cost reduction that we are looking at? I mean, there are again two major factors. I mean, there are smaller ones. 1 major factor is that we don't have to buy clinker anymore, right? So the INR 32 crore or INR 30-INR 32 crore expenditure that we made, right, is now not to be incurred anymore, right? That in itself increases your EBITDA per ton by INR 250. Then the other factor is the SGST benefit, right? That SGST benefit would have an effect of about INR 300 per ton weighted average on the overall volume, right? So that INR 300, again, is a significant chunk, right, which will be added in quarter two onward. So these two factors, of course, take you to the number of about INR 1,500. Then there are additional savings that we can make, right? Of course, the kiln that we've put right now is a bigger kiln. It will take another three to four months to fully stabilize and for us to get the variable cost benefit from it. So we will be shutting our inefficient kiln and operating the bigger one. So there would be heat rate benefits that we expect. We expect power consumption benefits. We expect some reduction in the fixed cost, which includes the manpower cost. We do, like how you mentioned, INR 62 crore run rate. We do expect that run rate to reduce, right? So I do expect that run rate, the increase in the manpower cost to be running at a run rate of about INR 45 crore out of INR 62 crore. So there would be a saving from there as well. So we do see savings from different, different avenues. So the two main avenues is that we don't have to buy clinker. The second one is that we will get the SGST benefit. Okay. That's great. Lastly, in terms of how much CapEx we have done in Q1 and for full-year, we were looking at INR 1,000 odd crores. So that still remains. What's the net debt level and how do we look at by end of FY 2025? Yeah. In Q1, we did about INR 110 crore of kcal. Our estimate for the year remains to be about INR 835 crore, in which we have already done INR 110 crore. Our debt right now is about INR 240 crore, which by the end of the financial year, FY 2025, we expect it to be about INR -350 crore. Okay. This is the gross debt and not the net debt we are seeing. Yeah. This is the total debt position will be at the end of March around INR 354. It is estimating right now. Okay. Okay. Great. All the best, sir. Thank you. Thank you. Thank you very much. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Maybe somebody else will ask. I had more questions. Just continuing. In terms of the incentive, we were looking at INR 150-160 odd crore for this year and next year, INR 200 odd crore GST benefit. In Q1, how much we have booked, as you mentioned, from only 15 June? And for full-year, will that number remain the same? Yeah. So the GST benefit that we got overall in Q1 was about INR 10.9 crores, right, which of course, from Q2 onwards, will increase significantly, as mentioned. I think a number of INR 10.9 crores in Q1 would be touching a number of INR 250 crores from Q2. Okay. Okay. Great. And in terms of 12 MW WHRS, which was supposed to start by August, September, so what's the status for that? And also recently, I think we have done some tie-up for the solar. So if you can explain on that part. Yeah. So the WHRS we are expecting to get from October onwards. So there are two phases of the WHRS. The first one will be commissioned in October. The second one will be commissioned by end of September. So this is called a WHRS of 2019. Okay. So this will be 66 MW that we will be adding in Phase I, Phase II? Yeah. So it will be 6 MW in phase one and 6 MW in phase two. The total WHRS is 12 MW. The new adjustment that we are setting up is 12 MW. Okay. The solar that we have done, so how that will help? What's the total? Sorry. We request you to return to the question queue for follow-up questions. There are several participants waiting for their turn. Okay. Thank you. Yeah. Okay. Thank you very much. The next question is from the line of Uttam Kumar Srimal from Axis Securities. Please go ahead. Yeah. Good afternoon, sir. Thanks for the opportunity. Sir, what is the current status of Jorhat and future plant? So for the Future Plant, we have acquired the land. We have gotten the ToR from the MoEF&CC. We have a public hearing in a month's time. By October, we plan to start the erection of the plant. By next year, October, we plan to commission the plant. So that is for Future. For Jorhat, we have applied for the MoU with the Assam government. We are, in two weeks' time, going to lock the land at which we will put the plant, on which we will put the plant. And we will then apply for EC. So of course, Jorhat is going to take almost a year more than Future. So if you are expecting Future to be commissioned by October next year, you expect Jorhat to be commissioned by October 2026. Okay. And sir, what is the current status of AAC blocks that we were putting up at a capital cost of INR 50 crore? That we should be able to commission by October this year. Okay. So we will also be getting some incentives in setting AAC Blocks? Yeah. There is a central benefit of GST. There is a SGST benefit from Assam. We'll be getting benefits from both the center and the state government in AAC blocks. Okay. Okay. Okay. Sir, what has been our fuel mix this quarter? The majority of the fuel has come from FSA and spot contracts from Coal India. So about 60% has come from there, about 20% was biomass, and about 20% was Nagaland coal. Okay. Okay. Okay, sir. That's all from my side. All the best to you. Thank you. Thank you. Thank you very much. The next question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead. Hello. Yeah, hi, sir. This is Rajesh here. Good afternoon. First question on the demand front. Volumes, you mentioned that it will be the nine months full-year volume growth would be lower than 20%. How is the demand currently in the September quarter? The demand, honestly, is very subdued even in quarter two. Again, that is mainly because of monsoon. Because in North East, the monsoon has hit much more severely than in other states and compared to last year. But we do expect that as soon as the monsoon subsides, we should see an uptick in demand because, of course, the effect of monsoon, which damages infrastructure, we do see a demand from that side and also the general demand, which has been tentative. So from September onwards, we do see an uptick in the demand. That is what we are anticipating. But in terms of the growth in the market, the market had degrown, actually, in quarter one for North East. It had degrown by about 8%. We still managed to grow by 3%. There is definitely an increase in the market share that we see in North East markets for us, as far as I know. Q2, also, you're looking at the market to regrow. For you, are you looking at July, at least, your volume should have been positive, or the monsoon would have impacted it negatively? No, sir. In July, we do expect positive growth. I do not expect the market to degrow in a similar trend in Q2 as well. There will not be a very good growth rate in the market for Q2 as well. I do not see it degrowing by many 8%. I also do not see it going back 10%. Okay. You mentioned that around INR 30 crore was an incremental costing on account of clinker purchase. You are mentioning the cost differential versus your own production? Yes. The cost differential versus my own production. Okay. So, this you're expecting, with the ramp-up of your own capacities, this cost to get nullified? Yeah. In nature, it is like a one-time cost that I mentioned, right? And also, there is about INR 6 crore of political donation, which is also one-time. And there is also about INR 4 crore of incentives in projects and project-related expenditures on top of the INR 30 crore, which is also one-time. So overall, if you ask me, I see about INR 40 crore of cost, which is, in nature, one-time. Okay. And incentives also, which was around INR 10.11 crore, which you have booked in Q1. Now, this quarter, it will be available for the full quarter, right? Yeah. It will be available for the full quarter. We should see that the INR 10.9 crores would roughly start touching a number of INR 40 crores. 40 crores. Quarters. Yeah. Okay. And that would be the run rate for subsequent quarters from the Assam unit? Yeah. I think, yeah, it will. This number, of course, depends on the sale also. So in quarter two, we do not expect that much sale. That's why we are expecting INR 40 crore in quarter three and quarter four, which normally tend to be higher sales in quarter two. So once that happens, then this number could also increase. Okay. And you mentioned that in terms of this old kiln, you will be retiring or you'll not be using. So how much is the capacity? Are you looking to scrap it or just use it when demand is close to peak or when utilization is close to peak? No, sir. We don't plan to scrap any of the kilns because the plant is, I mean, it's not as efficient as a new kiln. So it still, I mean, still meets the basic parameters of the cement industry. And it's not that old. It's 18 years old. So in cement, the kiln which we are working for almost 50 years also. So. This is line one, right? Around 0.8-0.9. This is line one, basically. So we are just going to close it for like two to three months. We just want to fix it, do some Capex in it, fix the cooler, heater, and all those things just to make sure that we are making it efficient and bringing it to the current standards of how the kiln should be. For the last three to four years, we did not get the chance to do that because we always were in shortage of clinker. Now that we have an opportunity where we have surplus clinker, so we want to take this opportunity to kind of make our older kilns more efficient. Okay. Okay. And is it the range only that the AAC Blocks are now you mentioned it is to be operational in end of this financial year? Did I hear it right? No. It was in October, I said. So, October AAC blocks. So this is, as per last conversation, it is on track. Okay. And there will be what sort of revenue you're looking at from this investment? I don't think the revenue numbers are that much. I mean, I haven't taken it out, but it's about 750 CBM per day capacity selling at 4,000 BCE. So I don't assume that a lot of revenue is particularly expected out of this, especially at the start. It would be roughly about about INR 80 crore, INR 70-INR 80 crore. But I think the profitability in AAC in North East, and given the synergy with Star Cement and the branding and the distribution channel, I think that works out very well. And particularly, the market for AAC in North East is very good because the red bricks are not easily available in North East. They're costly. The landed cost of red bricks is costly. So this is a very good product, environmentally friendly product, and also a product which, in North East's situation, works very well. So with that, we do expect that we'll be able to make a good EBITDA margin on that INR 80 crore turnover that we make, basically. And we take this project as, honestly, we take this project as not as a trial project, but we are just trying to venture into it. If it turns out well as we expect it to, then we will set this plant in other areas in North East as well to have a good distribution of AAC blocks across North East. Okay. Great. Last two questions. First, on the clinker plant, when do you expect the incentives to start kicking? And fuel cost, INR 1.5, which is already lower by around INR 0.15-INR 0.20 Q1 QoQ. Are there further savings possible on the consumption versus fuel cost? So I don't think right now we can see a further decrease in the fuel cost. I don't see a further increase also. So I think it's going to have to broadly be around the same yearly, 1.5. And the clinker subsidy would also start partially kicking in Q2 and then fully kicking in in Q3 and so on. Could you quantify how much would that be Q3, Q4 onwards? Quarterly versus. Yeah. I expect it to be about INR 13-14 crores. Okay. Great. I'll come back in queue. Thank you. Yeah. Thank you. Thank you very much. The next question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead. Yeah. Thank you for the opportunity. Sir, a couple of questions. Does any of our markets get impacted with, I mean, positive or negative because of the turmoil in Bangladesh? No, not really. I mean, we haven't experienced it till now. I don't think our markets are very connected to Bangladesh. There's some cement which comes from Bangladesh to North East. Nothing goes from North East to Bangladesh. Something comes from Bangladesh to North East and Srirampur markets and Agartala markets and all those markets. So I mean, if there is any positive impact, the positive impact could be that the cement starts coming. Yeah. I mean, that's what I was asking. Positive or negative, both. Yeah. But very minuscule amount comes. In a year, it's hardly like INR 1 or 2 lakhs. So it doesn't really make a difference that way. And I can't predict if they will start coming because Bangladesh may also stabilize in the coming weeks. So I don't know about that. But I don't see any negative, but I don't see a significant impact, basically. Understood. Second, my question was about the Capex. So I think you mentioned that the Capex that you plan to spend is about INR 835 crore for FY 2025. Is that correct? Yes. Yes. Yes. If you can just help get us a broad breakup of this INR 835 crore CapEx and also give some indication for FY 2026? Yes. Sounds good. So the INR 835 crore, to have to break it up, out of that, we've already spent about INR 110 crore in quarter one. So the breakup is that we had to complete the silo and the crusher of line two sorry, of the new clinker plant, which is of about INR 100 crore. We have to complete the WHRS, which is about INR 37 crore. We are investing in filters. So about INR 300 crore we expect to go in filters this year. We are investing in the AAC Blocks, about INR 55 crore for the AAC Blocks, about INR 100 crore for the land filling, land acquisition, and for basic service in Gujarat, about INR 70 crore for the BTAP wagons, which is basically to get cheaper fly ash in containers rather than in open rakes. So that INR 70 crore is going there. For Group Captive, which we have recently signed, which we are also notified, was about INR 23 crore. In general operations, it was about INR 100 crore-INR 150 crore. Right. So this. This is a breakup of INR 835. So basically, out of the INR 835, INR 300 is going in filters, INR 100 is going in Gujarat, and then INR 100 is going in the clinker plant that we have installed in completing some sections of it, and about INR 37 is going in WHRS. And then there's AAC blocks and BTAP wagons and so on and so forth. Yeah. Got it. And how much are you? I think I'm going to say. Yeah. We are anticipating about INR 172 crores in filters to complete the project. We expect it to be completed in INR 472 crores in total, INR 300 this year, so INR 172 next year. Gujarat, about INR 350 crores. INR 100 this year, INR 350 next year, and about INR 48 crores in BTAP wagons and about INR 100 crores in operational CapEx. Overall, it would be about INR 670 crores. Understood. INR 630 crore for FY 2026 as such, right? Yeah. Yeah. INR 670 crore for FY 2026. Yeah. Understood. Understood. That's helpful. Lastly, regarding this Group Captive SPV Group Captive capex that you gave, and INR 23 crore is being spent there. So if you can just give more details about what is the tie-up, what is the megawatt capacity contracted, how much power will we get, and also in the same breath, what savings can potentially be expected there? Okay. So I mean, in the Group Captive model, we have gone for a 18-megawatt Group Captive, which has about 70% CUF. In terms of the capacity, we are proposing to set up about 15 megawatts of solar capacity and about 32 megawatts of wind capacity. This is, of course, in tie-up with JSW. In this, in the SPV, we have gotten about 30% ownership in the SPV, which makes it a Group Captive because the ownership has to be more than 26% for it to be eligible for Group Captive for subsidy. So this is broadly what we have done. As far as the power that we generate, 18 megawatt is the capacity. 70% of that is expected on an average, right, per hour. So that power would be going through majorly to Guwahati in our grinding unit because the power rates in Guwahati right now are very high. It is almost at about 77.5 degrees per unit, which has increased over the last one year. So we do expect a saving of about INR 2.5 coming in power through that. And the overall saving that we expect of this INR 23 crore investment is about INR 22 crore per year. So the return on investment on this INR 23 crore is largely a year. Understood. So INR 23 crore remains a one-time CapEx, or is there more CapEx required? Yes. There and fragments? No. So I think INR 23 crore is the only CapEx that is required from our side as per the contract that we signed and the saving that we expect. This rate, whatever rate we have fixed, is fixed for the next 25 years. The saving that we expect each year would be about INR 22 crore-INR 24 crore. Understood. By when can we start factoring in these numbers, please? I think it is, contractually, it should be before 18 months. But we expect solar to come before because solar plants are easier to set up, and they're also quicker, panels are easily available. Wind would take about 18 months, and solar would be before. We expect the saving to come between 1 year to 1.5 years. Second half of 2026 is where you are seeing these numbers will start getting reflected, right? Yes. Yes. Yes. Helpful. Thank you so much. I think there are more questions. Operator, please take them. Thanks. Thank you very much. The next question is from the line of Uttam Kumar Srimal from Axis Securities. Please go ahead. Yes, sir. Thanks for the opportunity again. Yeah. Manoj, this time, our tax rate has been around 21%. And since our Guwahati grinding unit is eligible for lower tax rate. So this tax rate, we will have 21% tax, or it will go higher from here? No, but as far as because the SCLEL will be because the subsidy and all these things, we will have the subsidy. So the major portion of the profit will remain in the lower tax rates. So I think that the rate of 22%, approximately 22%, will continue maybe for the next five, six years till we get exhausted all our subsidy. Okay. Okay, sir. Okay, sir. That's all from my side. Okay. Thanks for the question. Thank you very much. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Yeah. Thank you, sir. Sir, just two, three things. First, this quarter, outside North East, the EBITDA per ton was how much? This quarter, outside North East, the EBITDA per ton was about INR 250. 250. Okay. Okay. And you mentioned that INR 12-INR 13 post-June, the prices have declined in East. And in North East, how much it has declined? It has declined in the 10-11 North East as well. Okay. North East also, it has declined. Okay. And this clinker subsidy of INR 13 crore-INR 14 crore, this is per quarter or per year that we will be getting GST value? Per quarter. Okay. Okay. Okay. Our plan to reach 20 MTPA by FY 2030, that remains intact. In terms of Rajasthan, we are looking at 4.5 MTPA that we are planning by spending an INR 2,500-odd Capex over the next three, four years. So that remains the same. So broadly, why I am asking is the overall, we are looking at INR 4,000-odd crore kind of a Capex in the next three, four years. So that remains the same. Yeah. So I think the Rajasthan, that is still a work in progress. We are close to getting a mine there. Once we do, we will inform. And accordingly, we will then sign out the Capex for Rajasthan and inform accordingly. Okay. Okay. And in terms of for this year, now, last time, we were looking at to sell a clinker of 0.4-0.5 million tons. So I think this quarter, I think it was kind of a nil clinker. So in the remaining quarters, are we looking to sell some clinker? Yeah. So from Q2 onward, we will see that there are some clinkers sold from Q2 onward. In quarter one, though, we were in the other position where we are buying clinkers. We bought about 150,000 tons of clinkers. So Q2 onward, definitely, we will see the other trend where we are selling clinkers. And that trend in Q2 will carry on through Q3. And in Q4, you'll see a good uptick in clinker sales as well. Okay. Okay. And then in terms of structurally, once the Dalmia's capacity will come up and also, even JK Lakshmi is also looking to set up a plant there. So structurally, for three, four, five years' perspective, don't you think that that can have a kind of other way that we are across India, we are seeing the pricing pressure? Will that kind of extra volume can have an impact on the pricing? I don't see that happening, honestly. I don't see about JK Lakshmi. I do not see any movement on the ground. I think it takes at least four to five years in North East to put up a plant. It's not that easy. Dalmia's plant is definitely coming. I think it will take a year or more from what I have understood. And whenever it does come, of course, there will be some pressure, right? But then we also have to realize that there will be only two players who have expanded. The rest of the players in North East are smaller, and they don't have any plans of expanding other than on ground. So from that perspective, the competition will, of course, increase because they also will get the plant. They will also want a share of the market, right? But overall, the competition is between two to three players for the expanded capacity, right, and for the increasing market. So I don't well, I do think that, of course, the competition scenario will become more intense, but it will not be remotely as intense as it is right now in East or in South. Okay. Lastly, Manoj sir, this depreciation INR 70 crore-INR 73 crore, will this continue, or it will start declining from Q2? We have capitalized the asset just because during the four years because of phase one and also the Guwahati unit had capitalized the full quarter depreciation there. Maybe this year, maybe second phase will capitalize then. The depreciation will go up for a little bit this year. But after that, because we are in a retained-own value matter, then from next year, on March, it will get decreasing. But this year, it will go up maybe quarter two, quarter three, it will go up a little bit. But from Q2 next year, on March, it will decrease in a decreasing phase. Okay. Okay. Got it. Thank you, and all the best, sir. Thank you. Thank you very much. The next question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead. Yeah. Thank you for the follow-up. Two questions. Sir, apart from JK Lakshmi, I think some time back, UltraTech also had done some, I think, signed up for an entity there. I'm forgetting the name, but there was some development or intent from UltraTech to tie up with a local player there for a plant. And also, as per the info available on the Environment Ministry website, another player called Megatop or Megatop, where they had applied for a clinker expansion. So if you can just throw some light if these players are seen doing any activity, any buzz that you are aware of from these two players. So I'll take, of course, maybe on a lookout to get a mine. From what I know, I do not think that they have been able to identify a mine. And I think there is a long process even after you identify a mine before you start setting up a plant and after you acquire a mine. So I think there is a lot of time. I don't think they've selected a location. They've selected the mine. They bought the mine. I don't think all those things have happened. Megatop is definitely a local player who is attempting to put up a plant. From what I understood, they're also having some difficulties from the MoEF and from getting the public agency yet. And I do not expect their plan to be either commissioned or coming up in the next three years. So that is my expectation. Of course, if there's any other development which happens over time, then I will communicate accordingly. Helpful. My last question was on the receipt of these incentives. You said for this quarter, our benefits were just around INR 10.9, and next quarter, we could see a significant ramp-up. I just wanted to understand, how do we plan to account for the incentives? These are on the actual receipt basis, or these are accrued, and then they come with a lag? No, no. It has always been accounted for in the accrual basis only. And there is no time lag because we have got in the past also, we have received GST benefits. Three months is the maximum time, which time lag is there. Okay. So there is no such time lag because in GST, once we finish the entire procedure, then every month, we'll file, and maybe in a month, we'll get back the money. And for IGST, clinker plant also, we'll get a quarterly return. And in the next quarter, we're filing. Within one month, we are getting those. So there is no such time lag. Maximum three-month time lag is there. Understood. Helpful. Just one more question, if I could slip in. You mentioned about the AAC block. Can I just request you to please repeat back? What is the revenue and EBITDA potential that you are looking at? I think you mentioned CapEx is more like INR 155 crore there, right? Yeah. No, no. I think I mentioned that the CapEx is about INR 55 crore. Okay. 65. Yeah. CapEx is about INR 55 crore. CapEx is about INR 55 crore. The revenue I expect at about 80% utilization or 70% utilization, the revenue to be close to INR 60-70 crore per annum. I expect the EBITDA to be about 20% of the revenue. Understood. So it would be about, yeah, INR 14, 13, 16 crores, right? And yeah, so I think the payback looks healthy, I think. Yeah, yeah. Okay. Very healthy. Great. Great. Thank you. Thank you so much, and all the very best for the time. Yeah. Thank you. Thank you very much. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Milind Raginwar from BOB Capital Markets Limited. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Hello? Hello? Yeah. Yeah. Yeah. Hi, sir. One thing is on the logistics cost, how would this move from here on? Will it be at the run rate level, or will we see some kind of an improvement in that once the new plant stabilizes? How should we look at this going forward? So I think the logistics cost in Q1 was, of course, a bit unstructured because there was clinker coming from outside, and the movement was not usual, right? So I think logistics cost should stabilize. Plus, we are also getting more fleet. So earlier, our return on our fleet was very good because our fleet, we were able to provide both inward, and that's what return also we could provide. So we have seen that to have our own fleet has worked very well and, of course, first, to save cost directly and also to have a tap on the overall logistics cost, right, to have a control of price ceiling on how the logistics cost behaves. So we have bought more trucks, which will be operational in Q2, and we will see the full benefit of it in Q3. So I do see that those things should have an impact on the logistics cost, especially the inward cost, the inward logistics cost, which is basically tires and clinkers. Okay. And did I hear that your overall EBITDA other than Northeast? Can you just please confirm that? I probably missed it. Overall EBITDA other than Northeast? Sorry. Can you repeat that question? Yeah. I was just thinking that you said that it's about INR 250 something other than Northeast EBITDA? Yeah. I think that was. This is the earlier question when you were answering something. Yeah. EBITDA per ton is INR 250. Yeah. 250. Okay. Just confirming that. Yeah. Yeah. Thank you, sir. Thanks. Thanks for this. Thank you very much. Ladies and gentlemen, that was the last question for today's call. I would now like to hand the conference over to the management for closing comments. Thank you so much for joining the call, and thank you for the questions. They were very detailed, and they definitely helped us put the company in the right perspective for the investors. We do look forward to better and more detailed calls in the future and calls where the company has done better than what it has in Q1. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect.